AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, March 11, 1998

• 1458

[English]

Senator Eugene Whelan (Western Ontario, Lib.): How many more of your members are there to come?

The Chairman (Mr. Joe McGuire (Egmont, Lib.)): Go ahead.

Senator Eugene Whelan: Okay. And when I leave, you can take over?

The Chairman: Sounds good to me.

Senator Eugene Whelan: Because I have to go to another.... Contrary to what you may think, senators do work; they don't spend all their time in Mexico.

The Chairman: At least not this one.

Senator Eugene Whelan: At any rate, I have to go to an interesting meeting this afternoon. It's a foreign affairs committee meeting, and we have the vice-chairman of the Canadian Imperial Bank of Commerce, the vice-chairman of the Royal Bank, and the vice-chairman of the Bank of Montreal to explain to us what went wrong in South Asia, APEC. A year ago they told us of glorious things, and we submitted a wonderful report on what the opportunities were in APEC. We were wrong. You remember what happened in APEC, the Pacific countries.

• 1510

This is Murray Calder, who is a farmer and a member of Parliament from away up in that other part of Ontario. His address is Holstein, Ontario, and that's just a little crossroads. He's a poultry farmer and a very successful poultry farmer. I should say if your wife was here she would probably say you were a poultry farmer and she is a poultry farmer.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): She is the poultry farmer. That's right. I'm the boarder now.

Senator Eugene Whelan: Anyhow, you wanted to know what the Senate agriculture committee does.

First of all, I want to welcome you to this building. This building is the oldest building on the Hill, and there was a big scandal when they built this building. Sir John A. Macdonald nearly lost the government over this building, because it was supposed to cost $600,000 when they built it, and it cost $1.2 million, so it was double over the budget. So he nearly lost the government over such a tremendous expenditure at that time, 1851, I believe it was. But you can imagine what was happening to him at that time, so this building has....

The room down below us was another committee room. The summit meeting was held there with all the Group of Seven. I forget how many years ago it was, but it is just like it was then. This building has the old Privy Council office, just like it was when Sir John A. Macdonald was here. The offices are down on the second floor in the hall just around the corner. Sir John A. Macdonald's office is just like it was, and Cartier's office, Georges Étienne Cartier, is just like it was, and the first Governor General's offices are down there, just like they were.

So this building is, how should I say—before Murray says it—for antiques. But when you look at these buildings I do not understand how you cannot be impressed with how far-seeing the Fathers of Confederation and the people who were building this nation 150 years ago were when they were putting it together. They were very far-seeing people in what they foresaw for this country, which is now the envy of the world. According to the United Nations survey, among people from the survey they took, 91% of them would come to live in Canada if they could, because it provides that kind of a way of life.

As for the different roles between the House of Commons and the Senate, first of all, of course the Senate is non-elected. It's set up as a copy in a way of the House of Lords in England, but it is different also.

In the Senate, we get the legislation after the House of Commons passes it, to give it sober second thought.

I should say, first of all, senators are appointed not for life, but they're appointed until they are 75 years of age.

They just appointed three new senators. One is from Prince Edward Island. Some of you may know him. I met him years ago when he was active with the Canadian Federation of Agriculture. He is about the same age as I am, so he's not going to be in the Senate very long. I believe he's 72, so he will be here three years. But he has a world of experience. He was in the air force during the war, he was a pilot in the air force, and he's done all kinds of things.

Then, Ross Fitzpatrick, who is a very successful businessman, is here from British Columbia. I've known Ross Fitzpatrick since 1963. He worked here at that time as a special assistant to the Minister of Immigration, I believe it was, Jack Nicholson, from British Columbia. Ross Fitzpatrick has been a very successful businessman over his career.

The other one is a woman from Newfoundland by the name of Cook. She's 65, but she has a world of experience.

So you have a make-up of people in the Senate who are from all walks and ways of life, and different ages, etc.

I was offered a Senate appointment in 1984, and I said no, I didn't want to be a senator; I wanted to do something that my background, my education, had allowed me to do, allowed me to achieve that much knowledge, which some people may doubt. I told the Prime Minister I was interested in something to do with agriculture, so they appointed me as ambassador to the Food and Agriculture Organization. But I never went there. Joe Clark fired me three months after my appointment, to save money; at least that's what he told me it was for at that time. But I never went to the FAO.

I finished out my term as president of the World Food Council, but I had to sign a paper with them at that time to finish out my term as president of the World Food Council, which was made up of ministers of agriculture from all over the world. It said that I would not sue the government for being fired as ambassador. So how do you say it? It was a hell of a way to quit a political career, in a way.

• 1515

The Senate sits at practically the same time as the House of Commons. This week it is not sitting, but the committee meetings of the Senate are meeting on things like I just told you for foreign affairs.

I'm on two committees. I'm on foreign affairs and I'm the co-chairman of the agriculture committee. We'll be spending probably two weeks in western Canada studying Bill C-4, the bill to amend the Wheat Board. We'll be holding hearings in Brandon, Winnipeg, Regina, Saskatoon, Calgary and Edmonton.

That's part of our job. Our job is to review what the House of Commons did. As a member of the House of Commons for 22 years, I used to have strong reservations about those senators having anything to do with what I did. I don't know whether Murray Calder feels the same way or not.

The Senate is supposed to give the sober second slant on the legislation and review it. It can call witnesses, etc. Sometimes if there is hardly any controversy over legislation it doesn't do it. It does hardly anything with it. We hear witnesses and the minister, etc.

They can sit in committee as a whole in the Senate, which we did on legislation before Christmas. They brought witnesses such as the Minister of Finance in before the whole Senate chamber. We did the same thing when they were amending the Constitution for Newfoundland and Quebec. They had the hearings in the committee as a whole. The Speaker is removed from the chair and the members appoint a chairman of their own to carry on the business. One of their own members is appointed as chairman.

The foreign affairs committee and the energy committee do a tremendous amount of work that nobody is aware of—I think that's how I could say it—in the Senate because they are non-elected. An elected member like Murray Calder.... I spent, as I said, 22 years in the House of Commons, but I spent 16 years in public office before I came to the House of Commons. You're always aware of what your electors want you to do. They question what you're doing, so you have to inform them at all times as best you can with the facilities provided for you.

Your time and mine would probably be slightly different from that of some senators, although not all of them. Some of them are very busy because they are better known. I get letters and requests from all over Canada because people remember me from when I was in public office.

I talked to you earlier about British Columbia, and I was parliamentary secretary to the Minister of Fisheries and Forests for two years. I travelled the east coast and the west coast, wherever there was a lumber mill, a sawmill, a pulp and paper mill, a spawning bed or whatever. I had that experience of learning about my country and having a better understanding of it.

Then, as Minister of Agriculture, there were very few parts of Canada I didn't see or go to for meetings. There was one secret thing.... You were talking about your Canadian agriculture lifetime leadership. A lot of ministers wouldn't go to small towns, but I discovered early in life there was always a man or woman who worked for the CP in a small town who got paid by the inch. So if you were in Morden, Manitoba, or Neepewa, Saskatchewan, or someplace, they'd send in twelve inches on the wire service that night. Maybe the next morning you'd have one inch on the front page of the Globe and Mail: Whelan said such and such in Come by Chance, Newfoundland, or Port Hardy, Vancouver Island. But if you went to Winnipeg or Toronto, nobody would pay any attention to you.

I'm saying that communication is something you learn from association and from participating in things like all of you are participating in here today. Your leadership, you call it CALL, Canadian Agriculture Lifetime Leadership—I guess you could say mine was pretty much a lifetime of that from the time I was a teenager with the co-ops, credit unions, the Canadian Federation of Agriculture and that type of thing. If that were today, you'd call them an activist. We didn't have TV; we had hardly even radio or anything when we first started. You communicated directly with the people, and that's still an important way of communicating.

• 1520

Another important way of communicating is to be recognized. I didn't wear my chapeau vert in here today, but as you know, my first green stetson was given to me in Swan River, Manitoba, when I opened the fair and exhibition. If you watched Country Canada the other day, you found out that this is one of the best places to go for a rodeo and so on.

So they gave me a green hat when I opened the exhibition and fair. I asked them what a green hat stood for. Even though I am partly colour-blind, Whelan is an Irish name. They said green stands for love, hope, charity, fertility, growth—all good things in life. Then I added, “and money and the Irish”.

I wore that hat all over the world. If I got off a plane or anything, they never had to look for me because there would be only one person on that hat—or under that hat. Some people have been on it, but....

Some hon. members: Oh, oh.

Senator Eugene Whelan: There's so much to say about this great country of ours, and what leadership and democracy means. I worry about people not participating enough.

I read all your biographies in the pamphlet and in the publications that were given to me. Your backgrounds are varied and diversified. You represent a wide spectrum of our country, and that's good, but it's so important that we understand and know our country.

Earlier I asked Senator Beaudoin whether he knew where River Canard was; if he knew where La Salle was; if he knew where Belle River was; Emeryvile; Pointe-aux-Roches; St. Joachin; Paincourt. He said, oh, of course, they're in la belle province, Quebec. I said no, they're in the most southwestern part of Ontario, in the county of Essex, city of Windsor. In Windsor one-third of its streets have French names. The main street in Windsor is Ouellette Avenue.

What I'm getting at is that to make decisions about our country, we should know our country.

As I said earlier, I have travelled all over the world, and I have never seen a country like ours. I've never seen a country like ours. The best part of any of any trips I ever took when I was president of the World Food Council, when I visited all the famine countries and the poorest countries in the world, was when I came home. God, I was so glad when I got home to Canada. Whether it was landing in Newfoundland or in Vancouver or wherever, I knew I was in the best country in the world, the country that had been built by people from all over the world, working together to create this. It's one of the few countries in the world that was put together without bloodshed. We never shed a drop of blood putting Canada together.

Baldwin and Lafontaine in 1839 or 1841, when they were working together—even then, that was quite awhile before Confederation—knew they wanted to build something different from the United States. They wanted a parliamentary system that was going to be different from that of the United States. They wanted a system that was going to protect religious and cultural rights, etc. They did that, and as I said, we continue to build today.

I'm way over ten minutes, but I can ramble on about the country we built because I'm so proud of what we were able to accomplish.

Any questions? Wait until I get in my hearing device. I never listen to myself talk. I was a child who grew up in the late twenties and early thirties without medicare hospitalization. That's why I wear a hearing aid.

Yes, ma'am.

Ms. Elspeth McLean-Wile (Canadian Agriculture Lifetime Leadership): Mr. Whelan, I'm Elspeth McLean-Wile, from Nova Scotia.

We've been learning a lot about leadership and leadership in agriculture. Could you give us what would be the most important thing we should know about being leaders in agriculture in Canada?

• 1525

Senator Eugene Whelan: God, I don't know. I can remember what Prime Minister Trudeau said to me one time about me being his Minister of Agriculture. He said, “Agriculture is so complex, I don't pretend to understand much about it. I don't know what you do and I don't know how you do it, but just keep on doing it.” He never bothered me much in agriculture.

I think leadership in agriculture has to be an understanding of agriculture itself. If there's anything wrong in agriculture in Canada today.... When I was first your minister, every bureaucrat in my department was an agriculture bureaucrat. They weren't from the finance department or Treasury Board, they were agriculture-trained.

Sydney Williams was from the Eastern Townships in Quebec, and he had never worked for anybody but Agriculture Canada from the time he was 18 years old and going to McGill or Macdonald, except when he went overseas during the war for four and a half years. He was like a big walking computer. He loved agriculture, etc. That was his whole life. And his assistant deputies were all agricultural economists or agricultural scientists, and so were the directors. I never knew one who was not agriculturally trained.

Some people think you can lead agriculture and not know anything about it. That would be the same as you going to the Ottawa airport tomorrow and being told the pilots didn't show up but Whelan's going to fly you. Don't you worry about it, though; even though I could fly a Cessna, I wouldn't want to try one of the big jets as far as that goes.

But some people think all you need is management and this type of thing in agriculture. I think you have to have knowledge of agriculture—and a good knowledge—to provide that kind of leadership. It just cannot be made out of a book.

Mr. Patrick Van Haren (Canadian Agriculture Lifetime Leadership): Good afternoon, Mr. Whelan. I'm Patrick Van Haren, from Ridgetown.

You have a great and varied experience. I find that leadership is also about protecting, helping people to come to grips with some of their fears. What is the greatest fear that you have for the people of Canada with respect to agriculture?

Senator Eugene Whelan: I could quote Churchill, I guess: the greatest fear is fear itself.

Murray is shaking his head, so I must have quoted somebody wrong, but I remember that. Somebody said that, anyhow.

I watch what goes on in agriculture. I read about three farm magazines a week, that type of thing, from eastern, western, and central Canada. When I read the stuff that is being published, I know it's wrong. When I watch it on television, I know it's wrong. Yet our society is supposed to be better educated.

I fear that we don't delve deeply enough into the issues, that we don't study them enough probably, and that we don't participate in them enough. We let a fifteen-second clip on television be our guideline, or something that we read in the newspaper. As a senator, for instance, I find that I could use a staff just to continue to crack that.

I was your Minister of Agriculture for a little over eleven years. There wasn't a day that I didn't speak up on behalf of agriculture. It was always in the forefront. We kept it there. The very fact that TV....

Urban people are concerned. There was a survey in our local paper the other day that said the thing people are most concerned about in Canada today, for instance, is safety in food. That was the top priority for 82% of them because they're concerned about what's happening to our food industry. They have that fear of being—how do you say it?—disconnected, too far away from what's going on in the food industry.

I fear that's what some of our farm leaders are experiencing. I fear a selfishness is entering into our farm industry, but that isn't how we built it in the first place. We built it by sharing and by working together, by building one of the best agriculture industries in the world, considering our weather conditions in the northern hemisphere. We built it by working together.

• 1530

People say now there should be no regulations, controls, etc., or this type of thing. I have strong reservations about that.

Mr. Conrad Toner (Canadian Agriculture Lifetime Leadership): Mr. Whelan, I wish we had more time. The more I hear you speak, the more I like to listen. It's been great for all of us to meet you again. We wish you all the best. Thank you very much.

Senator Eugene Whelan: Thank you. You're very kind.

I just wanted to say this. I see all these capable MPs coming in here, but there's so much in the challenges we face in our culture today with new crops, technology, and biotechnology.

Some people will tell you that I'm against biotechnology. I'm very much against some biotechnology that I don't think is safe.

When we were in agriculture, no one did more research than we did. I'm the strongest believer in research that Canada probably ever had. I can remember speaking in Manila to a group of scientists from all over the world. They could not believe that a farmer could be such a strong proponent of research. Research is our most important product of all that we have, but good, safe research.

You talk about fear. One of the biggest fears I have today is that we're not going to have enough public research. It's going to be independent and it will make those decisions for the good of all in our society. We're going to be dependent on big companies like Monsanto and some of these people.

I have written to ten universities asking for the research programs they've been involved in and the sharing programs to find out how many they said no to because there were too many strings tied to them by the people funding them. I haven't been able to put this all together, but I can tell you that it's rather shocking. For every dollar we spend on research, we could show you that the minimum return was $7 for that.

There are those of you who are from out west. Let's talk about canola. What if there hadn't been a kooky minister who put millions of dollars into research on lentils to make you the capital of the world for lentil production? We put money into that and hired research scientists from the United States to come work in Canada.

I could continue on about the short-season corn and soybeans, etc., which were developed by Canadians, by Agriculture Canada scientists' research. I could talk to Mr. Toner about the potatoes in New Brunswick and this type of thing.

To me, I loved research and agriculture, and I still do, but I see some of the things that are happening in our society with people saying that they can do better on their own and they don't need any neighbours and they don't need to work in the cooperative spirit that built Canada.

There I go. See? I didn't pay any attention to you anyhow.

Some hon. members: Hear, hear.

• 1535

The Chairman: Now I would like to welcome the people from Canadian Agricultural Lifetime Leadership, CALL for short.

We want to get right down to business. If you would identify yourselves for the record, then tell us who you are, what you do, where you get your funds, and stuff like that, we'll go to each party and they will give you a précis of where they stand on agricultural issues.

Mr. Vic Bruce (Canadian Agriculture Lifetime Leadership): I'm Vic Bruce, from Moose Jaw, Saskatchewan. I'm a primary producer there. I'm involved in the pedigreed seed business: wild seeds, pulse crops, and durum wheat.

Ms. Wendy Durand (Canadian Agriculture Lifetime Leadership): Good afternoon. I'm Wendy Durand, from Carman, Manitoba. I'm an agricultural representative with Manitoba Agriculture and also still connected with our family farm operation.

Dr. Pauline Duivenvoorden (Canadian Agriculture Lifetime Leadership): I'm Pauline Duivenvoorden. I'm a large-animal veterinarian from Newfoundland. My husband and I also have dairy farming.

You're asking about funding. It's primarily from the supply-managed sector.

Ms. Alanna Koch (Canadian Agriculture Lifetime Leadership): Good afternoon. I'm Alanna Koch, from Edenwald, Saskatchewan. I'm the executive director of the Western Canadian Wheat Growers Association. I also farm a very, very, very small grain farm with my husband.

Mr. Patrick van Haren (Canadian Agriculture Lifetime Leadership): I'm Patrick van Haren, from Ridgetown, Ontario. We're involved in pork production, more specifically swine breeding and artificial insemination, with an eye to exporting a lot to the United States.

Ms. Wendy Bulloch (Canadian Agriculture Lifetime Leadership): Good afternoon. I'm Wendy Bulloch. I'm from Brandon, Manitoba. I work as a district rep with Manitoba Pool Elevators and I have my own consulting business. Thank you very much for allowing us to come.

Ms. Linda Braun (Canadian Agriculture Lifetime Leadership) : Good afternoon. I'm Linda Braun, from Saskatoon, Saskatchewan. I'm an agri-food consultant and one of my clients is the Saskatchewan Flax Development Commission.

Mr. Conrad Toner (Canadian Agriculture Lifetime Leadership): I'm Conrad Toner, from Grand Falls, New Brunswick. I'm a seed potato grower.

Mr. Vernon Crawford (Canadian Agriculture Lifetime Leadership): I'm Vernon Crawford, from Alberta. My wife and I have two sons and we operate a poultry farm in Alberta.

Mr. Robert Ross (Canadian Agriculture Lifetime Leadership): I'm Bob Ross, from southern Ontario. I'm a dairy farmer in Perth County, a neighbour of Murray's.

Mr. Steve Twynstra (Canadian Agriculture Lifetime Leadership): I'm Steve Twynstra, from southwestern Ontario. I manage a cash-crop farm. We've been exporting dry beans for 20 years.

The Chairman: Thank you very much. Would someone like to tell the committee what you stand for and what your reason for being is?

Mr. Scott McLean (Canadian Agriculture Lifetime Leadership): We will be making a presentation before the committee tomorrow morning to give a more elaborate overview of the Canadian Agriculture Lifetime Leadership program. Essentially the mission of this program is to develop effective leaders for the Canadian agrifood industry. Tomorrow morning we will be prepared to give a more detailed review for your committee.

The Chairman: Okay. Thank you very much.

We will go right to the speakers from each party, and we'll start off with the Liberal Party, with Mr. Murray Calder, from Ontario.

Mr. Murray Calder: Thank you very much, Mr. Chairman.

As Senator Whelan said, in my other life I used to be a farmer. My wife Brenda is now the farmer. We have a poultry operation in central Ontario. Currently we are marketing about 350,000 chickens a year. We also have a welding and fabrication business, because when I originally trained I apprenticed as a millwright, so I'm a welder by trade.

What got me into politics, and probably every one of us in this room has been in this situation, was the local small-town coffee group: “If I were the member of Parliament, this is how I would do things”. The people in my riding have given me the chance to do that two terms in a row.

• 1540

The Liberal government, in my opinion, has a record we're quite proud of. It's a record of four years of sensible programs and solid accomplishments for agricultural producers in rural communities.

I have a book here entitled At Work in Rural Communities and also some smaller books. This one is put out by Revenue Canada and is a guide for Canadian small businesses. Also by Industry Canada are Ten Steps to Exporting Success and Your Guide to the Government of Canada Services and Support for Small Businesses.

You may wonder why we're doing these books. Quite frankly, I sit on the economic development committee, and one of my complaints as a member of Parliament and as a small-businessman is that government comes up with all these great programs but nobody knows anything about them. People don't know where to source them, and that's currently one of the things we as a government are trying to do at present. This book, for instance, is going to be condensed much more than it is right now, into a smaller version. As the member of Parliament, when I go around my riding I have these in the back of my truck. I have handed out over 1,500 of these, 1,700 of these, about 1,800 of these. It's good resource material.

Our policies have been aimed at improving markets for Canadian agricultural products, helping producers in rural areas adapt to change, creating a favourable business environment and improving access to information and capital and investing in education. The government has also provided stronger, more effective market information and export support services.

To help Canadian exporters compete with their foreign competitors, the agri-food credit facility will provide as much as $1 billion in additional credit and credit insurance for foreign sales.

The agri-food trade service helps industry adapt to a more competitive global marketplace by offering development programs for exporters and a wealth of information on trade and government programs.

As a result of the government's efforts, agricultural exports have increased by 50% between 1993 and 1997, reaching an all-time high of more than $20 billion in exports. At the same time, the government has vigorously defended our supply management system. This is a very important issue for me.

Supply management has meant a firm economic base for Canada's rural communities and high-quality, reasonably priced products for Canadian consumers. During the Uruguay round of trade negotiations, the government successfully negotiated strong provisions under the World Trade Organization to maintain our supply-managed sectors.

In 1995 the United States challenged our supply management tariff structure. Our government fought the U.S. at every step of the way and we were vindicated when a dispute settlement panel ruled unanimously that Canada was right.

At the same time, the government has eliminated trade-distorting, commodity-specific subsidies. Only the dairy subsidy remains, and it will be phased out by the year 2002.

Other parties will tell you that they support the removal of subsidies, but we Liberals also believe that government has a responsibility to help these sectors during the difficult transition period that accompanies the removal of subsidies. For example, the government has created the western grains transition adjustment fund, which has a budget of $300 million to help the grain sector adjust to the elimination of transportation subsidies.

The government has also supported producers in practical and tangible ways as they have risen to the challenge of adapting their operations to the new global economy and emerging technologies.

The government has worked in partnership with hundreds of rural communities to ensure their viability, to broaden their economic base and to ensure their desirability as places in which to live and work.

One example is the Canadian adaptation and rural development fund. The fund supports adaptation initiatives to encourage diversification, value-added processing, market development, innovation and job creation in the agriculture and agri-food sector. This $240 million fund will help the agri-food sector manage the changes being thrust upon it as a result of fiscal restraint, new world trading rules and new technologies.

• 1545

The Liberal government recognizes that small businesses create many of the new jobs in rural areas. Given their contribution to the rural economies, small businesses must be supported as much as possible. Created by a previous Liberal government, the Business Development Bank helps create and develop small and medium-sized businesses by providing capital and management services.

This government has also worked to improve the business environment in Canada. The federal budget has been balanced, interest rates are down, and employment insurance premiums have been reduced every year since 1995. The government has also reduced the paper burden for small businesses.

Since this government took office, more than 320 regulations have been revised or revoked. One example of the government's move towards regulatory efficiency is the creation of a single food inspection agency. Created last year, the agency consolidates food inspection activities that used to be carried out by three separate federal departments. The new agency reduces duplication and saves the Canadian taxpayer $44 million a year. It also provides a single point of access for food importers and exporters, making it easier for them to certify that their products are safe.

The government has also worked to help farmers gain access to capital. The 1997 budget allocated an additional $50 million to the Farm Credit Corporation. The FCC promotes growth and diversification in rural Canada. It supplies specialized and personalized financial services to farming operations, including the family farm, and those businesses in rural Canada that are related to farming. So we have expanded the mandate to value-added.

To succeed in the future, we must continue to improve our products and our production methods. To ensure that Canada remains a leader in the agricultural sector, the government provides stable funding for agricultural research and development. This is something the senator was talking about, and it's very important for us in the future. In fact the federal government is the largest single contributor to agricultural research in Canada, investing more than $300 million a year.

The government is also committed to ensuring that rural Canadians have access to information technology and higher education opportunities. The community access program will put public Internet sites in rural communities with populations between 4,000 and 50,000 residents. By the year 2000, 5,000 rural communities will be connected to the Internet. A similar program, called SchoolNet, aims to have all Canadian schools—and there are some 16,000 schools—connected to the information highway by the end of this year.

Ladies and gentlemen, I can remember when I went out and talked to my first municipal council in 1994. I talked to them about the information highway, and basically the municipal councillors looked at me and their eyes kind of glassed over a wee bit, as if to say, “What the heck's he talking about?”

Here we are in 1998, and just think of what an integral part the Internet is right now within the farming community. Anybody subscribing to DTN, for instance, has all the futures, the market commodities coming over, and weather through the Doppler. All this is becoming more and more connected through the Internet.

Traditionally, distances have been a barrier for rural Canadians seeking higher levels of education. As a part of its renewed emphasis on learning, the government will be providing greater access to learning opportunities. The Canada Millennium Scholarship Foundation will help rural residents offset the costs of attending educational institutions outside their communities.

Because of our concern over the quality of life in rural areas, the 1998 budget confirmed funding of $20 million for the Canadian rural partnerships initiative, which will build on a broad range of programs and services already in place. The initiative will fund pilot projects that will, for example, provide better access to health care and better access to capital in rural areas. Under this initiative, the government will provide money and technical assistance to stimulate locally based initiatives that will help rural communities adapt to changing circumstances and identify new sustainable development. Canada's strong economy cannot be sustained without a healthy agricultural sector.

• 1550

Ladies and gentlemen, as a farmer and a person who has always promoted rural Canada, I would point out that we're a base industry and we're second only to the automotive industry here in Canada. That's something to be proud of. Due to the fact that by the year 2025 the population on the face of the earth is projected at nine billion people, research and development and the health of this industry is imperative. I believe right now that's the job of members of Parliament within this institution, to make sure that governments are not reactive to the needs of agriculture, but proactive. As a chicken farmer, having had the honour and the privilege to serve in the Government of Canada, that's one of the things I've been actively trying to promote.

Thank you.

The Chairman: Thank you very much, Murray.

Also on the government side is John Harvard, from Manitoba, the parliamentary secretary to the minister, Mr. Vanclief. And from Quebec is Denis Coderre.

Now, from the Reform Party, we have Leon Benoit and Jake Hoeppner.

Leon, you're going to speak on behalf of the Reform Party. Go right ahead.

Mr. Leon Benoit (Lakeland, Ref.): Thank you very much, Mr. Chairman, and thank you all for inviting us here. It's much appreciated. It's really an exciting opportunity.

I think what you will hear is some difference between what the government promotes and what we propose. Just as an example, with the Millennium Fund that was mentioned, when you look at that, 94% of students will never have access to that fund. So you have to be careful with what's advertised and what's actually there.

Certainly that leads to an important issue that affects not only farmers, but certainly farmers, and that's the issue of taxes that are too high. I think it's programs exactly like that that lead to these high taxes. Clearly, taxes are too high. Fifty percent of what we earn now is spent for us by government at one level or another. That's there for farmers, the same as anybody else.

I want to categorize issues into those that affect all farmers, and then deal with some specifics. Obviously I don't have much time to do it, so I'll be quite brief.

As to issues that affect all farmers, first of all, I think there is too much government interference in several areas. For example, there's too much paperwork, and I'm sure you can all identify with that. Whether you're farmers or whether you're running other businesses—of course you're all involved in agriculture—you know that you have to spend more time than is reasonable on paperwork. There are too many hoops to jump through, unnecessary regulation and regulation that really doesn't do the job well.

Taxes are too high, not only income taxes but of course the excise taxes, for example on fuel, and payroll taxes like CPP premiums, which will increase by 73% over the next few years, unemployment insurance premiums, and so on. And if you have employees, those will affect you.

Of course, with CPP, being self-employed, as most farmers are, you pay both portions of the CPP and you're looking at a huge amount of money going out for a program that gives you a maximum of $8,800 down the road.

I want to deal a little bit more with programs that are a little more specific to agriculture. Just before I go to that, though, along the lines of taxation, we've seen user fees increase dramatically over the last few years. I'm not against user fees, but before user fees are put in place you have to have the corresponding reduction in spending in the department, and that hasn't happened. You haven't seen that corresponding reduction in spending, in terms of the operation of the department, yet you've seen user fees increase dramatically. That's just another type of taxation, and it's affecting many of our processing industries in particular, but primary agriculture as well, and in a very negative way.

Among other issues that affect all farmers, I think, or most farmers, is the problem we have in streamlining our pesticide regulatory system. What we have is pesticides that are available to the Americans, they can put them on their crops and import into Canada, and it's a long way down the road before Canadians can use these products on their own crops. Many times it gives the Americans a competitive advantage that is unfair or puts us at an unfair disadvantage. So I think that's another issue that affects most farmers.

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Other issues are environmental issues, and I think these also affect pretty well all farmers. For example, in intensive livestock operations there is a lot more that you have to do to set up a new operation. And many problems have come up in existing operations.

There is the issue of fertilizers and pesticides applied to crops and these products finding their way into the soil, the water and so on.

There is other legislation in the area of the environment, like the endangered species legislation, which I believe.... If you don't really look into what's happening in this area it could have an impact on all landowners, but certainly on farmers to a great extent, way beyond anything that you could imagine. Unless you really have looked at it.... It's extremely important. We should make sure that a more voluntary approach to protecting endangered species is put in place rather than the heavy legislative approach that could and will cost farmers a lot of money. And there's the threat of litigation as well. So there are certainly concerns in that area.

There is the issue of high input costs, a huge part of which, of course, is tax. It's a concern to pretty well everyone in the agriculture industry. That tax portion of input costs is growing and growing.

Now, on to specific issues. Supply management is one. Unfortunately, I think, governments for the past ten years haven't really been upfront about what's going to happen, about the change that is going to occur and which, to some extent, has occurred in supply management. We're still going to see a dramatic change in supply management over the next five to ten years. I don't think governments been really upfront with this. And they have to know that it's going to come.

With respect to U.S. challenges, we've seen several of those. Canada could easily lose one of them. I think the biggest threat is the 1999 round of GATT negotiations and the resulting WTO rule changes, which will make the supply management industry compete with the Americans. Of course, on the other hand, it would also give more access to the American market.

So that's certainly a pressure on supply management. I think there is very little doubt that this change is coming. There are positives and negatives that come with that change. Probably one of the negatives will be lower prices. There is very little doubt about that. The positives, of course, are lower costs and, especially, the absence of quota costs down the road.

As any of you involved in supply-managed industries know, probably the greatest cost you face is quota cost. Of course, the negative side of that is that people who have quota will see it lose value, and that's an issue that certainly has to be dealt with, a very difficult one. But I think the precedent has been set with the elimination of the Crow benefit, where there was at least a partial pay-out for the loss in value of the Crow subsidy. The same thing could happen with quotas in supply management.

Other specific issues include the Canadian Wheat Board. This mainly affects western Canadians, and I think that's part of what's unfair about it. It's really an issue of giving farmers a choice in marketing instead of having a government monopoly. There has been a broad call from farmers in western Canada for a choice in marketing. I think that has to come.

In the area of grain transportation and handling, which is more a western issue as well, I think we've seen changes made to the system, several key changes to the transportation and handling system, before the system was changed so that it would really work.... I'm talking about things like the elimination of the Crow benefit. I think it had to happen. We supported the government on it but we said that first the government had to make sure the system was in place to allow efficiencies in the transportation and handling system. That did not happen.

With regard to the change to the Canada Transportation Act, again, there was a big impact on transportation, but the changes that would make that new act work weren't put in place first.

And the privatization of CN Rail had a huge impact, yet the changes weren't put in place that would allow that to work well. We're seeing problems, for example, with the abandonment of branch lines right now.

As well, in the grain handling and transportation system, we see constant stoppages throughout the system. That not only costs money for it to merge and so on, but leads to lost markets.

In the area of safety nets, we've seen some changes over the past years. Most of the interest in safety nets that I've had expressed to me has come from Ontario and eastern Canada. In western Canada there's really been less focus on safety nets, but there are changes being proposed by government in that area, and I guess we'll see what happens with that.

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I said this when I started and I'll close with this. You'll probably notice a difference in tone between the government side and the Reform MPs, because we're looking for a government to still do less in some areas, but certainly to interfere less. That's a real concern we have.

If you need any evidence that government getting out of the marketplace and interfering less really works, then look at the livestock industries in western Canada, particularly the cattle industry. We've seen a doubling of the cattle industry in Alberta over about 12 years. The industry was destroyed in 1975, when governments right across the country competed one against the other for subsidies for farmers to keep bred cows so the cow herd would expand. They did it with good intentions, no doubt, but it just destroyed the cattle industry.

Now the government really isn't involved in the cattle industry in any significant way, and it really is a model for an open market system. We see the industry in fact very healthy. There was an extremely short downturn of a year and a half to two years, and then really a stretch of 13 or 14 years of good markets in the cattle industry. I know cattlemen in Alberta are extremely happy about that.

That's the example we should look to for just letting farmers really carry on business and keeping government involved just to the minimum extent possible. That doesn't mean we don't need regulation—not at all—but it has to be kept to a minimum and it has to be regulation that farmers can work with and that isn't too cumbersome.

The Chairman: Thank you.

Our next speaker would be Jean-Guy Chrétien from the Bloc Québécois, but I don't believe he's here today, so I'll go to the New Democratic Party, Mr. Dick Proctor from Saskatchewan.

Mr. Dick Proctor (Palliser, NDP): Thank you very much, Mr. Chair.

Welcome, everybody. It's a pleasure for me to be here with you this afternoon.

I thought I would just take a very few minutes to talk about some of the issues that we see emerging in our caucus and indeed in this standing committee. I don't want to confine everything to what our party is saying.

Let me just indicate what those are, what I'll be speaking about: the WTO, World Trade Organization; cost-recovery and high input costs; and grain transportation.

In terms of the World Trade Organization, I think it's fair to say that the Standing Committee on Agriculture and Agri-Food is concerned about the state of readiness for Canada going into the next round of the WTO, which will probably begin, or is expected to begin, in late 1999, late next year. We've signalled as a committee that we want to get involved to make sure we're ready. There's a feeling that under the General Agreement on Tariffs and Trade, the Uruguay Round, we weren't really prepared for what was happening in the changes to agriculture. We don't want to see that happen next time.

There was at least one meeting that I'm aware of in Saskatoon last fall to get farmers a bit prepared. We think there's a lot more that should and needs to be done in that area. We're working well as a committee to achieve that. A safe and secure food supply is part of that. Supply management has been mentioned as well.

I think if Jean-Guy Chrétien were here from the Bloc, he would be talking about the concern and the challenge we have right now on the butter-oil-sugar blend issue that Canada is currently endeavouring to get turned around.

Those are the sorts of things we see on the horizon in the WTO.

As for the second point, cost-recovery and high input costs, I would come at it this way. Over the last few years, as the government has indeed reduced and eliminated the deficit, agricultural exports have played a significant role in helping our balance of payments and helping to eliminate the deficit. The question I have in my mind is, where are the rewards for that for the farm sector? The Minister of Finance, when he unveiled his budget two weeks ago, spoke for something approximating an hour and a half, and the word “agriculture” never passed his lips in the entire 90-minute address.

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As has been mentioned, in western Canada we're seeing decreases in safety nets or stabilization plans. We also know the farmers are a resilient lot. We think Canadian farmers are the best farmers in the world, but at the same time the input costs are really significant.

When I was back in Palliser constituency, which is in the Regina and Moose Jaw area, at Christmas-time, I met people who told me quite frankly that the days of the farm lobbies and the farm rallies were over and people were not into that any more. They were rather looking in a very hard-headed way at their financial situations. If they were between 45 and 55 years of age they were generally trying to make a break from farming. You will know that despite the youth from the CALL group around here, the age of farmers, at least in my part of the world, is certainly going up. The older farmers of 55 to 65 are endeavouring to see if they can hang on until they can sell their farms and retire in some degree of comfort.

Specifically, a gentleman in Swift Current told me that a year ago he and his wife were figuring out how they could entice one of their sons to come back to take over the farm. They've decided in the last 12 months they would not “sentence” him—and that was the exact word they used—to the kind of life they are currently living.

John Solomon, who is a colleague of mine and represents a Regina-area riding, was in the community of Semans last week and tells me 100 quarters of land are up for sale in that community. So we're seeing some very low commodity prices right now and some very high input costs, but what we're not seeing is any kind of stabilization program from governments, generally, to alleviate the low ebbs of agriculture. I'll just turn to grain transportation and then come back to this in closing.

On grain transportation, this would obviously affect mostly the prairie provinces. We're seeing the accelerated dismantling of rail lines. We're seeing the rapid growth of inland terminals, and as a result branch lines are being abandoned left, right and centre. This means western Canadian grain farmers are hauling their product further, which is having a very negative impact on our road beds.

Freight rates with the end of the Crow benefit three years ago have doubled and perhaps even tripled in places. Finally the government in late December appointed retired Supreme Court Justice Willard Estey to a grain review panel, which is supposed to have a preliminary report in May and a final report by December. Our caucus position is that there should be no more dismantling of any rail lines until the Estey report is in. We feel if we do less than that, the lines may very well be torn up and the report will be totally meaningless.

Let me just close by endeavouring to answer the question asked to Senator Whelan, which I think was “what was your greatest fear”. My greatest fear for the future of agriculture is agri-business. I grew up on a dairy farm and thought there was no life like it. I really enjoyed that part of my life. But with high input cost, low commodity prices, and the fact that we don't seem to see enough young people getting into farming for a whole host of reasons you will know at least as well as I, I'm really fearful that over the next decade or so we will see a real increase in agri-business across Canada. I think that is a worrisome trend.

Thank you very much, Mr. Chairman.

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The Chairman: Thank you, Dick.

Last but not least is Rick Borotsik, from Manitoba and the PCs.

Mr. Rick Borotsik (Brandon—Souris, PC): Thank you, Mr. Chairman.

The first thing I should say is that because I come after Dick Proctor, Mr. Chairman, I'm incensed. He looks at my notes all the time and he always gives my speech. I don't want to sit beside him any more, Mr. Chairman.

The Chairman: Jake, sit between those two.

Mr. Rick Borotsik: No, I don't want to sit beside Jake either. I have to work this one out by myself.

Mr. Murray Calder: Are you trying to unite the right here?

Mr. John Harvard (Charleswood—Assiniboine, Lib.): Now I know why you're sounding more like an NDPer.

Some hon. members: Oh, oh.

Mr. Rick Borotsik: Not at all.

The Chairman: Go ahead, Rick.

Mr. Rick Borotsik: First of all, I would like to welcome all of the delegates, but most particularly the Manitoba delegates, Wendy, Wendy, and Grant. We're pleased to have you here in Ottawa, and certainly pleased to have you before the agriculture committee. Hopefully we can share a little bit of our experience, and perhaps a little bit of what we feel are the major issues at agriculture standing before us not only for this year, but obviously for the years to come.

As an introduction for those of you who don't know me, I'm from Brandon, Manitoba. Brandon, Manitoba, had—and still has—the distinction of being the wheat city. Make no mistake about it, we are the wheat city.

I unfortunately do not have personal roots in agriculture, although I do have some background and experience in agriculture through a family that's still on the farm. I was the mayor of Brandon, Manitoba, for a number of years, and I can assure you that the economy in the community itself is totally dependent upon agriculture. It is the backbone of our economy, and I recognize that.

Having being an elected municipal official, I can tell you that I've had many meetings with the same reeves and the same mayors Mr. Calder has in his area, and those mayors and reeves obviously are based in agriculture. I learned very quickly that if it weren't for agriculture, my community would not exist, quite frankly. So I understand the importance of that particular industry.

In saying that, just by way of explanation, having that agricultural base, Brandon has a very large industrial base as well, although in most cases it is directly related to agriculture. We just had a $250-million expansion to an agriculture fertilizer plant called Simplot. That $250-million expansion means that has been added to an asset base of about $250 million already, with agriculture obviously being its main customer in the production of anhydrous ammonia.

Mr. Chairman, I'm very proud of the fact that we have the one and only type of its kind of industry in the world—not in Canada, but the world, and some of you in western Canada may in fact take advantage of this—a pharmaceutical manufacturing company called Ayerst. Ayerst uses a raw material by the name of PMU, which is taken from “pregnant mare's urine”. I find it very difficult to go on and make it sound terribly romantic that Brandon is in fact the horse pee capital of the world, but we are. We're very proud of that, because it adds about $80 million into our agricultural economy, not only in Brandon, but in Saskatchewan and also Alberta.

There is one last industrial kingpin that we now have, and to which the chairman alluded. We have also just been announced as the new location for Maple Leaf Foods' 2,000-employee hog plant that is going to be developed this year and next year, and it will be operational for the fall of 1999. It will process approximately 2.5 million hogs, of which the majority will be produced in our area, in Manitoba, Saskatchewan and Alberta.

So quite frankly, that's what we are: we are agriculture. Make no mistake about that.

Do I have five or ten minutes, Mr. Chair? You never cut anybody else off.

The Chairman: I didn't cut you off yet either.

Mr. Rick Borotsik: I know, but I'm worried about you.

Mr. John Harvard: We already heard your speech from Proctor.

Mr. Rick Borotsik: Then I don't have to give the issues, do I?

Some hon. members: Oh, oh.

Mr. Rick Borotsik: I don't know if you're aware of this, so maybe we can just explain a little about the committee process. I believe the committee process is made up of seven Liberals, three Reformers, two Bloc, Proctor and myself. This is where the work really gets done, both in theory and in practice. From my experience here, as limited as it is, I quite frankly have to admit that I enjoy committee work because we can sit down and be non-partisan. Although you wouldn't notice it from Murray's speech or from Leon's speech, the fact is that we can be non-partisan here. We can actually deal with what we consider to be the important issues that face us in agriculture.

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Our chairman was elected by the group. He wasn't my choice, but he was elected regardless. He's from Prince Edward Island.

Mr. Murray Calder: You can cut him off now.

Mr. John Harvard: He was our choice.

Mr. Rick Borotsik: I know.

I would like to get into the issues, because after that comment the chairman will cut me off.

Dick again stole one of my opening comments. The question that was asked was a great question, and it was what is the fear for agriculture in the future? Quite frankly, my answer is a bit different from Dick's, because he was concerned about agribusiness. My biggest fear for agriculture is the fear of change. Agriculturalists, farmers, producers, agribusiness, have to be able to embrace the change that's going to come to us over the next years. We know agriculture today is nothing like it was 10 years ago. We know agriculture today is certainly nothing like it was 25 years ago. With agriculture we have things before us right now we never even thought would exist. Quite frankly, we had better be able to embrace that change, what is going to happen to us in the future.

I've always used an adage. It's much better to manage change than to have change manage you. That is the biggest fear. We saw that in debate on the Canadian Wheat Board, the Bill C-4 legislation. We saw where people were not able to embrace changes that are going to happen regardless.

We know right now, and I'm sure you as future leaders of agriculture, or current leaders of agriculture, recognize, that changes are going around us constantly. Until five years ago we had monopoly situations in utilities. Those monopoly situations have changed. The organizations have dealt with that change and in some cases have been very successful and very efficient with it.

Change comes in a number of fashions. We talk about biotech. We talk about genetics. Those are two words which scare the living hell out of a lot of people when you talk about them. But make no mistake, it is here. It's the future of agriculture. We had better, and you had better, be able to deal with that change and manage that change, because we have to keep up with it.

We have fears, quite frankly grave fears, about globalization and global trade. We want to be protectionist, yet we want to get into the field of globalized trade. There are great fears about being able to compete in that globalization or in that global trade, and we have to make sure we are properly prepared to get into that.

I want to talk about a couple of shortcomings right now. Then I'll get into four issues I have. The first one—and Dick touched on it—was the budget Murray lauded, and the positions of his government in the budget—

Mr. Murray Calder: You're not being partisan, are you?

Mr. Rick Borotsik: I don't want to be, Murray, I really don't, but Dick did steal my notes again.

Nothing in the budget mentioned agriculture. We noticed it because that's our job. We sit here and we try as best we can to make sure the profile of agriculture is brought to the table. There was nothing in the budget.

I did find one small clause. It was a $20 million program over four years. It was called “rural development”, and it's going to facilitate these pilot projects which are going to bring all the departments together. I think it's real tokenism, if you want to know the truth about it. But in the budget nothing was mentioned about agriculture, and I have a fear about that.

I want to talk about three very major issues. One is the WTO. It has been touched on. In 1999, with the negotiations in the WTO, as Canadians and agriculture, we had better be prepared when we go to the table. I think we've done a fairly reasonable job at the committee, having the chief negotiators come before us to tell us what their positions are and give us a status report on a very regular basis so we know they are going to be prepared and Canadian agriculture is not going to be just a pawn when it gets to the WTO.

These are my priorities for this year.

Grain transportation has been touched on. Grain transportation quite frankly sucks. It really does. There is Willard Estey out there right now. He is going to do an excellent job. I have a lot of faith in Willard Estey. I believe very strongly he and his advisory committee are going to come back and have some excellent recommendations. My fear—this is the second time I'll be a bit partisan—is there will not be the political will necessary to implement the changes that have to happen for us to compete in the world markets.

There has to be political will. The system right now is inefficient. The problems are systemic. In order to change the system, you have to have political will. That's why we're here, and I'm sure we can work together on that one.

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The last one, which hasn't been touched on, is income protection. We have NISA coming up in 1998 to be renegotiated. I believe very strongly in NISA. I think it's a good program. There has to be some extension of the NISA program.

Along with that, I think the government has to deal with extraordinary issues concerning agriculture, and we ran into a number of those. We ran into natural disasters—for example, in the Red River Valley. We ran into natural disasters with the ice storm. We have other natural occurrences that aren't basically put into the NISA program and that should be outside of that program, but there should be a logical, well-thought-out program that certainly has rules set down as to how natural disasters are going to be dealt with.

Biotech is absolutely the biggest issue to face us in the next three to four years, without question. We must have a clear mind and vision as to how we're going to deal with those issues, not only locally in Canada—it deals with education, it deals with understanding—but with our global trading partners that perhaps don't have the same understanding of the biotech and the genetics that we're going to be dealing with over the next little while. I find that very exciting, by the way. It's good, positive change, but we have to be able to deal with it positively.

Mr. Chairman, thank you for the time. I know you're going to cut me off. I have a thousand other issues, but those are the main ones that I think this committee will have to deal with over the next 12 months. Thank you.

The Chairman: Thank you.

I will now take questions for our guests. Please put your questions through the chair, directed to whomever you want to pose the question. I don't want to get into too much debate, but if a question or an answer requires a response, I'll allow that. I want to get as many questions in as we can. Either indicate to me or to the clerk if you want to ask a question.

Mr. Vernon Crawford: Mr. Chairman, I have a lot of questions.

We just had the opportunity to tour in the U.S., and some of that was posing questions on their programs, internal support programs and such, and looked at packages that talked about some $64 billion. I guess we're 10% the size of the U.S., so $6.4 billion wouldn't be an unreasonable number.

Actually the question I have—I'm not in the dairy industry, so please excuse me if it's posed very simply while the dairy industry is rather complex—anyone can choose to answer. It relates to the butterfat issue. I understand it has been given to the CITT to work on. Is that correct? Just as a farmer out there, I sort of ask why. That's my question. Why would members of Parliament that we elect, with their authority to deal with issues such as this very significant issue in the dairy industry, transfer that process to what I'll call the bureaucratic level?

Thank you.

The Chairman: Mr. Harvard.

Mr. John Harvard: Thank you very much. I'll try to answer it.

It's not an easy issue. Perhaps that's one of the reasons it has gone to the CITT. The dairy industry has indicated, at least up until now, that it is not going to present its views to the CITT. We think it would be beneficial to this particular exercise, this process, for it to do so.

I guess I would put it this way: We now live in a rules-based trading world. As a result of the WTO, we entered into a worldwide treaty that requires us to follow certain rules. We now have international obligations, and of course other countries have similar obligations. In this respect the government felt we could not take what might be called unilateral action. This is what the Dairy Farmers of Canada wanted. They felt we could simply go ahead and put the butter oils at a particular classification level and that would be it. But there is concern that if we were to do that, it might invite some kind of retaliation or break our obligation to the treaty.

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So while we concede that in the short term it doesn't resolve the issue, not completely, perhaps the CITT can look at this issue from all perspectives and provide us with, if not the ultimate solution, at least a better direction. I think the ruling, the decision, is supposed to come down by the end of June, so let's see what happens.

I do admit it's a difficult issue, and we'll see what happens after the CITT ruling. It may take then a further political decision. You indicated in your question, why not just make the political decision now? There may have to be another one—I don't know what it would be—after the CITT decision, but by following this process, we may be in a better position, maybe. It is a difficult issue.

The Chairman: Is that fine then?

Mr. Vernon Crawford: Thank you.

The Chairman: Next questioner.

Mr. Niels Holbek (Canadian Agriculture Lifetime Leadership): I'm Niels Holbek, from British Columbia.

I didn't hear any of the members discuss opportunities for the agriculture community to contribute to meeting Canada's obligations under the Kyoto agreement, and I wonder if there are any comments about that, particularly in relation to self-sequestering of cargo.

The Chairman: Do you want to tackle that, John?

Mr. John Harvard: I'll try to give an answer.

As you know, Kyoto resulted in a particular target for a particular time, but we haven't come to the specifics. We haven't yet developed the tools to meet those targets. That applies not only to agriculture but to every aspect of our economy. I would hope that sooner rather than later we can come to a kind of program, as it applies to agriculture, so we can all get into a debate as to whether that is the proper thing to do.

So you're just going to have to give us a little bit of time. As you probably know, under our policies, the domestic aspect of it will come under Environment. International obligations and so on will come under Natural Resources under Mr. Goodale.

Just give us a bit of time and then you'll see what sorts of proposals we come up with. I'm sure when the proposals are made, that will create some debate, and that's fine. We live in a democracy, and in the final analysis, after a debate, we'll all be better off.

The Chairman: Mr. Benoit and Mr. Borotsik would like to add something to that.

Go ahead, Mr. Benoit.

Mr. Leon Benoit: First of all, I think you're right that there will be some opportunity as this is implemented. Part of the opportunity will come from reduced tillage. We've seen that a lot of the carbon matter that is lost in agriculture is through loss of organic matter in the soil. That's been pretty much halted and may be in slow reversal through reduced tillage and so on.

On ethanol, some would argue that it would make sense to have an expanded ethanol industry. We have to be really careful on that and make sure we're using scientific evidence to back it.

The unfortunate part of this whole thing is that the Kyoto deal should never have been signed, and it may well not be implemented. There's some pretty good indication that the United States might not implement it. Canada may not. Certainly the federal government will require the support of all the provinces, and we know there are three or four provinces that probably will not give that support, although until recently there was some talk that they might, and that's kind of changed again. So it has to get the support of the provinces and it may well not be implemented.

It's an agreement dealing with an environmental issue that really isn't supported by scientific information to any great extent. So I have a real concern with the deal ever having been signed.

We have so many serious environmental issues to do with agriculture that must be dealt with. We have a lot of serious issues, and I mentioned a few of them: certainly the intensive livestock operations in the cropping area; pesticides, fertilizer, and the impact of that on groundwater and so on; and endangered species legislation.

Farmers tend to be environmentalists. They always have been, I think. They haven't done everything right, but they certainly really care about the environment and want to do what's right.

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The Chairman: Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

First, let me say that it's easy to stick your head in the sand and say that there's no problem with the environment. I don't believe that. I believe that there is, and science does prove it. By the way—

Mr. Leon Benoit: Who said that?

Mr. Rick Borotsik: You just said that science didn't prove the fact that there is an issue with respect to carbon dioxide emissions. I don't subscribe to that. I believe there is.

And in saying that, I don't think our government and our country were terribly well prepared when they went to Kyoto and put their positions and their commitments on the table. I wish those questions had been asked prior to us going to Kyoto in order to see how agriculture was in fact going to be affected, either on an opportunistic basis or a negative basis. Leon touched on that very briefly.

I had meetings with Saskatchewan and Manitoba zero-till people, and they tell me that they can in fact look at about a 7% to 8% total reduction with zero till. It's something that we have to look at. It's a different way of farming. It's a different practice. Obviously we have to embrace changes in the future. I think that's very positive. I think we should be looking at that.

There are also some other very positive aspects to agriculture, I believe, in dealing with the environment right now. I'm sorry that the government didn't have a better understanding of this before they went and made their commitments in Kyoto. That's all I'm saying. There is an issue and obviously that issue has to be dealt with.

The Chairman: Okay. Murray, a short one.

Mr. Murray Calder: One of the things, too, that we have to look at as a government negotiating with nations of the world about the environment is a credit system.

Currently Canada exports natural gas to the United States, which they use for hydro generation. If we weren't exporting natural gas to the United States, they would be using fossil fuels, like coal, so the emissions would be that much higher. Now there has to be a benefit for that. We are taking the hit on it right now. Quite frankly, I think there has to be a better credit system set up.

Secondly, we just submitted our own farming operation in Ontario to an environmental plan to find out how we stack up. I think that's something that we, as people involved in agriculture, should do. It was a very great learning process for both myself and my wife, because there were some things that we were very pleasantly surprised about in our operation, according to what you should be doing environmentally. There were other things that we looked at, and there was some minor tinkering that we had to do.

These are all things that can have benefits. A credit system, for instance, would go a long way towards promoting biofuels like green diesel, two-cycle oil and green gasoline out of canola. I know it's not economically feasible right now to have it out on the open market, but if there is ever another energy crisis like there was in 1977, we would not be in that position again.

The Chairman: Thank you.

Mr. Shauf.

Mr. Marvin Shauf (Canadian Agriculture Lifetime Leadership): Thank you, Mr. Chairman. Marvin Shauf, from Saskatchewan.

During the presentations, a number of comments were made relative to WTO and the next round.

In the United States they have a program that is currently delivering approximately $11 billion per year to producers down there, and although it's decoupled from direct agricultural production, it's not decoupled from agriculture. You have to be a producer in order to be able to be a recipient. For wheat, it amounts to about 72¢ or 73¢ per bushel based on your historic production. That number will be reducing from $11 billion to somewhere in the neighbourhood of $4 billion over the next number of years, but that still provides producers in the United States with some pretty significant cash over that next number of years.

So I have two questions. Number one: since we are competing in a global marketplace and on the North American continent, what does Canada do to keep our producers competitive during that timeframe? Number two: what is Canada's upcoming position relative to blue box programs and green programs in the next round of trade discussions?

The Chairman: Mr. Harvard.

Mr. John Harvard: I think Marv has touched on a couple of good issues, which doesn't come as a great surprise. I had the pleasure of getting to know Marv when I spent some time with the Saskatchewan Wheat Pool last year.

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Let me just put it this way. The federal government realizes that the next round of the WTO is going to be a difficult one. The old Uruguay Round was difficult. The job wasn't completed and we're going to have to have another one, and I assume that there will always be a future round, if I can put it that way. I'm sure this particular round is not going to end every particular dispute or problem.

The position of the government is quite straightforward, in that we have not struck a position at this point and we won't until we see the whites of their eyes. We're not going to come out with any position until very close to the time the negotiations open, and there's a reason for that. I think we need almost every minute between now and when the negotiations begin to determine what the issues are and what the agriculture and agrifood sector really sees as the issues—and you've already mentioned a couple—and other ones, and what the possible solutions are.

We've set up a process. We've invited industries to bring forward their concerns and their proposed plans and solutions. We've gone out as a department and held one-day seminars, informational sessions and that kind of thing, and it's a way to trigger, to activate people on these particular issues. We feel that by going through this process—and we're doing it right here at committee as one level, but the department is doing it on a very broad range—towards the end of next year we as a government will be in a better position to strike that negotiating position.

I'm sure that when we announce our negotiating position on various fronts, that will not make everybody happy. That's the nature of negotiations, especially negotiations that are somewhat public. But that's the process, and we think that's the right course to follow.

I think the more debate and the more consultation we have with everybody in this broad agricultural community, the better the position we will be in to negotiate.

The Chairman: Mr. Benoit.

Mr. Leon Benoit: I think you've hit on a really important issue, not just supply management but especially in regard to supply management. One of the concerns is that as the markets open up and as competition increases, trade may well not be fair.

Americans are great protectionists. There are subsidies; there are trade barriers that are there and haven't been well identified. Many have, through the last set of GATT negotiations, NAFTA, and so on, but a lot of them haven't. That's why Reform has actually called for a joint subcommittee of agriculture and trade to be set up here to look specifically at these hidden subsidies and other unfair trade practices used in the United States so that we have this information available now. We're not going to wait until the negotiations start in 1999. We'll know what we can go after, and we can start talking to the Americans about them now, saying these are the kinds of things we want dealt with.

Unfortunately, this committee has so far denied that joint subcommittee being set up. The international trade committee has said yes, let's go ahead. I think it's important that we do that, and I hope this committee will in fact go along with that. I think it will really serve a very useful role.

The Chairman: Just to expand a little bit on your question, the committee decided last fall to meet as many agricultural representatives as possible over this next year to get their input as to the World Trade Organization, where Canada should be. We will be feeding that in to the minister and to the department. This will be an ongoing concern of the committee over the next number of years.

Also, on the issue Leon brought up, we have asked the department to supply the committee with all the subsidies the Americans give their producers. At that time, we will be making a decision whether we will pursue it further, that we need more information.

Jake, did you want to expand there, or should we go to another question?

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Mr. Jake Hoeppner (Portage—Lisgar, Ref.): I was just going to add that what we should be looking at is the issue of a level playing field as far as taxes are concerned. If you look at your fuel taxes and if you look at some of the other taxes...

I live close to the U.S. border. When it comes to grain-drying time, I know I can buy propane at about half price in the U.S. from that manufactured in Brandon.

These things have to be ironed out, because we don't have a level playing field as far as the farmers are concerned. I think that's as important as your subsidies or your green programs. We have to realize that we don't have the assets the U.S. Treasury has.

The Chairman: Go ahead.

Ms. Alanna Koch: Thank you.

My question is to the government members. We talk about change all the time. The reality is that we do live in a world of infinite change, probably in every industry, and certainly in agriculture. Farmers have been probably the quickest to adjust to that change—certainly, I think, quicker than agribusiness, and most definitely quicker than government.

My question is with respect to the Canadian Wheat Board. There's no question that change is inevitable. I guess what our industry finds frustrating is the fact that government won't seem to embrace change, won't seem to embrace the fact that change is inevitable with respect to the marketing structures we have here in Canada.

We find it frustrating that there are roadblocks, it seems, in the way of having a made-in-Canada solution to the needs of farmers. We've seen the Ontario Wheat Producers' Marketing Board in fact come to a decision very recently that they are going to give some choice to their farmers. We don't have that choice in western Canada. I would ask the government members why we don't adjust, why we don't make a made-in-Canada solution for the problems we do have in western Canada with respect to no choice in how we market our wheat and barley.

We should move quickly, because the Canadian Wheat Board is going to end up destroying itself, and we may in fact be without a very important marketing structure here in Canada. I guess the point is that choice has to be there. It has to be voluntary. We must quickly adjust our marketing structures in western Canada. Otherwise we are at risk of losing it completely.

Mr. John Harvard: Ma'am, I would respectfully suggest that you are underestimating the changes provided for under Bill C-4. I think if you truly, and as objectively as possible, look at Bill C-4 you will see all kinds of change.

I'm not going to try to enumerate them all, but there is, for example, the change in governance. I know certain people have tried to besmirch this change about giving the majority of the memberships on the board of directors to farmers, but the fact of the matter is, that's what it is. It's going to be a 15-person board, 10 of whom will be elected by farmers. It will be farmers who are going to be controlling this new board—not the government. It will be farmers.

I happen to have a lot of faith in the farm community. I mentioned the name of Marvin Shauf a few minutes ago. Farmers have run Prairie Pools for years, and I think they've done a hell of a good job. They elect their delegates, and they elect their boards of directors. I can't see why they can't do the same thing with the Wheat Board.

I happen to be a supporter of the Wheat Board. It could be, I guess, that somewhere down the road the board of directors will say, well, we don't like this agency, and we want to do something else. Who knows? I suppose that's going to be their right.

You mentioned a voluntary board. We happen to think—very respectfully—that a voluntary board simply doesn't work. The kind of board we will have under Bill C-4, when it's ultimately law, is that it's a partnership with the federal government. It's going to be different from any other grain marketing agency in the private sector.

I would simply pose one question to you. The Wheat Board, currently and under the new Bill C-4, under the new legislation, will be backed by the federal Treasury to the tune of $6 billion a year. Now, do you think for a moment that if it becomes a voluntary board the other grain marketing agencies in the private sector would put up with that anomaly for one minute? And why should they? Why should the Cargills of the world be backed by the federal treasury in Ottawa, and some other grain company not? Do you not think that we would be into a court battle very quickly? I would suggest we would, probably by tomorrow morning.

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The fact of the matter is, in our wisdom, farmers on the prairies want this kind of marketing agency, and they want a partnership with the federal government.

There are going to be in Bill C-4 all kinds of new marketing tools that the board of directors can choose or not choose. I would just say, and I would repeat what I said at the beginning: I think you are underestimating the changes that are incorporated into Bill C-4. In fact, those whom I would respectfully call traditionalists think that the changes go too far, and I think you probably know that—that Bill C-4 has sort of split the farming community.

There are those who want to get rid of the board completely and those—well, there are those who use it under the guise of “Well, we'll just go for dual marketing, a volunteer board”. In our opinion, if you have that, you're effectively killing the board. But there are those who don't want major change because they think it will ultimately destroy the board.

We as a government have tried to find some compromising ground, some middle ground, and we hope that it's going to work. I would say give it a try, and let's see what happens. I think the farmers will do a pretty good job of running it.

The Chairman: We still have four questioners.

Ms. Alanna Koch: I know. I'm just going to have to say that we'll have to agree to disagree on that one. Unfortunately, farmers' livelihoods are at stake here in western Canada. But thank you very much for that answer.

The Chairman: Okay. In addition, the Senate is going to have hearings out west.

Ms. Alanna Koch: I'm aware of that. Thank you.

Mr. Peter Volk (Canadian Agriculture Lifetime Leadership): Hi. I'm Peter Volk, from Saskatchewan.

There were comments earlier on the aging farm population that we have. I guess the question is what do we want to do with the rural lifestyle? It isn't a matter of maintaining the rural life, but do we want farmers on the land, or do we want large corporations running them?

In my opinion, in Saskatchewan, or in most of the prairies, we have a very small window for our farming operations. It's quite different from agri-business in the United States, where they have one more month to manage their cropping and such. It comes down to how are we going to run it, and who is going to run it? There's a generation of people missing, who aren't there, in my community anyway.

We're going to be looking at recapitalization of agriculture. What the young farmers or even more mature farmers don't need is debt. I guess my question is how or what is the committee doing to address the upcoming problem or the current problem of recapitalization of agriculture?

The Chairman: We'll let the opposition respond to that.

Mr. Jake Hoeppner: That's a tough question, but I could do it very quickly. Let farmers manage their business, like they have done in the special crops area, and we will keep farmers on the land.

I got a fax on my desk today saying that malting barley in the U.S. is selling for $2.60 U.S. a bushel, which is $3.60. This farmer got $1.72, and he's within trucking distance. He could have had that picked up at his farm. He could have had another dollar in his pocket. That's what keeps farmers on the land.

The other thing that has to happen is that government has to start realizing that we have to have green programs. They can't just take away our transportation subsidies and then expect us to compete with Americans who get $45 an acre. That's ridiculous. If they don't want to let farmers run their business, then they'd better get behind farmers and give them the same kinds of programs the U.S. has, because that's who we're competing with. It's a simple as that, to me.

The Chairman: Mr. Borotsik.

Mr. Rick Borotsik: Thanks, Mr. Chairman.

That's a great question, and I'm not so sure there's any real answer. I don't think anybody has a crystal ball sitting in front of them right now, but I guess the best answer is that there's an evolution. We talk about the changes in farming, the changes in farm practices. There's an evolution, and I don't think you can artificially change that evolution. I don't think you can put legislation in place that's going to stop agri-business, if you wish to refer to it as that, or corporate farms.

I remember my uncle farmed on 160 acres of land. It can't be done any longer. You have very large operations. You have large production. You have large cashflows and you have large capitalization.

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In my area right now, a number of smaller farms have been sold. They're being incorporated into larger commercial farms. You can't artificially change that. That's a part of the evolution that's going on around us right now. To try to legislate that would be very difficult.

There is policy that can be put into place by government, certainly, that deals with taxation and opportunities to market. It deals with all of those other good things, but that doesn't necessarily mean that those small farms are going to stay.

Maybe the evolution in twenty years is going to mean that people are going to move back into the farms into smaller areas and smaller operations. They're going to do more of a mixed farming operation, as opposed to just simply grain farming. Nobody has a crystal ball, Mr. Chairman, I'm sorry.

Ms. Wendy Bulloch: First of all, Mr. Borotsik, I would be very remiss if I didn't mention the expansion of Westco, which is part of my company.

Mr. Rick Borotsik: Oh yes, I'm sorry. I apologize.

Ms. Wendy Bulloch: A few of us here around the table have partnerships in it.

Mr. Rick Borotsik: By the way, $25 million, Westco.

Ms. Wendy Bulloch: Yes. Thank you.

Here's my question to the committee. Over the past 10 days, this group of CALL participants has had a unique opportunity to travel to Montreal; Albany, New York; Washington, D.C.; and Guelph. We've heard a recurring theme about a need for a globalization attitude, technology, and strategic alliances. I'd like to know what strategic alliances or partnerships this committee is employing, particularly in the area of consumers and producers.

Mr. Rick Borotsik: The chairman has to answer that one.

The Chairman: It's a good question. We haven't really thought about that very much.

If we're looking at the global situation in Canada, if it has anything to do with agriculture and its effect on consumers, whether it's biotechnology or whatever, that's included in the mandate of this committee.

It's a matter of course. It's not something that any other committee hasn't done or any future committee won't do. The producer and consumer go hand in hand, basically, through this whole business, as far as the Standing Committee on Agriculture and Agri-Food is concerned.

Mr. Murray Calder: Actually, I think probably Wendy is part of the answer. That's the reason you're taking this program. It's very similar to the advanced leadership program too.

If we're going to sell ourselves into the next millennium, we have to learn the art, first of all, of what I refer to as the 30-second bite. Stay away from acronyms. We have to get our story out.

The reason I say that is because we're at least now three to four generations removed from the people who actually turn over the soil. In other words, grandpa and grandma aren't even on the farm any more.

Consider the issue of BST, for instance, with the dairy industry. We had this in front of the committee. We went and got a moratorium on it. It was quite frankly because the research that was done on it was done on the product, not on the resistance of the consumer to the product.

As we are less than 3% of the population actively turning the soil over right now, we have to be able to be smart enough to get our own story out concisely to the consumers so they understand it. That's because, quite frankly, they go for their eggs and chickens and everything else like that at the grocery store. That's where these things come from as far as they're concerned.

They see our closed-in buildings right now. Vern will tell you about this with poultry, for instance. People wonder what we are doing in those barns. We say our farms are bio-secure. They wonder what that is. They wonder why they can't go in there. The perception is that I'm still in bibbed coveralls, wearing a straw hat, and having a piece of hay hanging out of my mouth. That guy went 45 or 50 years ago. So you're part of the answer too.

Mr. Robert Ross: I'm Bob Ross, a dairy farmer from southwestern Ontario. I represent a commodity that's under supply management. That's obvious.

Globalization is not friendly to supply-management commodities. If we're going to have growth in our industry, it requires a lot of expenditure and quotas.

I would like to know if the government of the day is addressing any risk-management policies that would be available to compensate for reduced quota values that we see coming down the pipe as a result of the globalization.

The Chairman: Murray.

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Mr. Murray Calder: Currently no, not that I'm aware of. With the dairy industry, though, the blends issue, for instance, before the CITT, if we're going to protect the supply management system—and quite frankly, as a politician I want to, because I have a vested interest: I have a poultry farm—the boards have to give me something I can defend. That's it in a nutshell. Those boards have responsibility for action themselves too.

With the CITT, for instance, the reason why we've taken the route we're taking with it is in the past, if you take a look at yogurt and ice cream, when they were put on the import control list.... They were taken off in 1989. We put them back on again. That is 10% to 15% to the dairy industry. Quite frankly, the United States missed it. When they came back and said to take it off, we said no, you signed it. They took us to the dispute panel and the dispute panel said yes, they are right; it stays.

Well, with the blends issue we are both wrong. The government negotiators were there. DFC was there; Richard Doyle was there. Quite frankly, we both missed it. That's the honest answer to this.

And who would know that somebody would figure out that if you brought in butter oil at 49% instead of 51%, which 21.05 covers—

Mr. John Harvard: It's no longer dairy.

Mr. Murray Calder: That's right.

About New Zealand, I'm not aware of any sugar plantations in New Zealand, so obviously this is something we have to look at. Not only is it butter blends, but what else is out there?

This should be before the CITT. We've won everything we've done so far, so we want to find out immediately what the legal parameters for this are before we go to court. I don't want to go into the dark and take a shot.

That's supply management, yes. It's going to be under pressure; I don't deny that. But the Uruguay round took seven years. Who knows how long this one is going to take.

One of the things I as a farmer want to see is agriculture negotiated by itself. I think that's where our strength is.

The Chairman: Mr. Hoeppner.

Mr. Jake Hoeppner: I was just going to add to that. Mr. Calder is right to some extent, but we in the Reform Party have been warning the government that there should be some kind of transitional program to keep especially the young dairy farmers in business. The U.S. is a lot bigger. The global community is a lot bigger. They are going to negotiate with all kinds of levers we don't have.

I think that is why it's so very important that we harmonize our farm programs with those of the U.S., because they are our best supporters. They are probably the biggest stick we could have on our side if we bargain with the Europeans, or even with the Asian countries. I think it's very important that we get ready with some programs for a transitional period. If we don't, we'll have problems.

The Chairman: Sheldon Cooper.

Mr. Sheldon Cooper (Canadian Agriculture Lifetime Leadership): Thank you. I'm a grain farmer from Saskatchewan.

Mr. Harvard, at the risk of belabouring the point about Bill C-4, I know you feel we as farmers are underestimating the change offered in Bill C-4, and I want to submit to you that in fact you are underestimating the needs of the farmers of western Canada.

What I really want to talk to you about is transportation. We're all aware the Justice Willard Estey review is going on right now. What I would like from you and from your government is a commitment that when Justice Willard Estey does make some positive recommendations for change in transportation in this country you will in fact implement those changes, unlike what was done when the Western Grain Marketing Panel was implemented to look at the marketing situation.

The Chairman: Mr. Harvard.

Mr. John Harvard: I'm not trying to be facetious, but I assume you're talking about recommendations you see as positive. I suspect there will be some recommendations you will see as positive and others will see as negative. We as government will have to make a choice. That's part of the responsibility we have.

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I would hope that more often than not we would share your opinion, that what you see as positive we would also see as positive and we would go ahead and support that kind of recommendation from Mr. Justice Estey. I don't know what he's going to recommend. I know that he comes highly recommended. I think there appears to be a lot of confidence in the man. I think he has a great background, a good reputation. And let's hope that he does come up with some solutions that perhaps we as government or others have not seen.

I think that over the next two or three years transportation is going to be without a doubt the number one issue on the prairies, and it should be. Now that the WGTA is gone, the freight system, the transportation system is even more important. I grew up on a farm. Although I didn't make my living from farming, I think I'm well enough informed that there is a kind of diversity out there in the agricultural community and it's pretty hard to find unanimity on any particular issue. But let's hope that Mr. Estey comes up with some excellent work, that we can support those recommendations and move forward quickly and that we can have your support as well.

The Chairman: For the last question, the lady at the back.

Ms. Lee Pengilly (Canadian Agriculture Lifetime Leadership): I'm Lee Pengilly from southern Alberta.

I agree, Mr. Calder, that it's politically correct to be two or three generations away from those who did till the soil and don't turn it over any more. But my specific question is whether the committee has a position regarding the labelling of genetically modified foods with the Codex Alimentarius.

Some hon. members: Oh, oh.

The Chairman: Mr. Harvard, do you know if they are going to have a position?

Mr. John Harvard: They're referred to in the business as GMO's, genetically modified organisms. It's something that is ongoing with us. As you know, we're in a great tussle with the Europeans. We've had some success of late with the French, but it's an area that needs a heck of a lot more work. So the progress is slow, but I think from Canada's outlook we are moving in the right direction and we're going to have more successes.

Ms. Lee Pengilly: As a certified organic grower, I might comment that there are also a lot of marketing opportunities for those of us who would like the labelling as an opportunity as well.

Mr. John Harvard: Sure, okay.

The Chairman: They're doing that in the United States now too; they're advertising this in the BST-free milk.

Mr. Murray Calder: On a point of clarification, right now the organic growers do not have a national standard; you have provincial standards. And it would be worth while for your industry if there were a national standard that was recognized as such if you're going to look at export.

Ms. Lee Pengilly: Yes, more of that. Thank you.

The Chairman: I want to thank everybody very much for a very interesting afternoon. We'll see some of you tomorrow morning.

I want to remind committee members that we have a steering committee tomorrow for future business, and in Room 200 at 5.30 p.m. there will be a reception. The CALL people will be hosting a reception for all members of the committee who would like to attend.

Mr. Rick Borotsik: Where's the committee meeting tomorrow, Mr. Chairman, back in the West Block?

The Chairman: Room 269 West Block.

The meeting is adjourned.